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"Will my insurance cover assisted living?" and more real talk about senior living costs

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During the years that I counseled families exploring senior care options, I had thousands of phone calls over countless hours discussing the ins-and-outs of finding care, choosing care, and, most importantly, affording care.

As I struggled to help find every family the right care option for their loved one, we had some long, deep conversations. And the majority of the time, we were speaking about money, or how to afford care.

Real talk about affording assisted living: It ain’t easy but you can do it.

Senior care marketing has long relied on glossy stock photos and feel-good euphemisms, but these marketing approaches don’t work for today’s worldly-wise, tech-savvy consumers. Today’s consumers respect marketers who bring refreshing honesty and openness about the tremendous good emerging from senior care, as well as the real challenges, especially finances. We must acknowledge the average American middle-class family won’t find it easy to pay for assisted living.

The finances of senior care can bring stress, sleepless nights, and energy depleted on efforts to make the math add up. Yes it’s hard, but you and your family can make it work. It takes willingness to learn, cooperation and ingenuity. It also calls on us to to have the courage to ask relatives to step up and help. And it takes compromise around providers, apartment sizes, and amenities. You may need to choose a smaller room in a budget-friendly community instead of a spacious apartment in a luxury high-rise.

A crash course in a class we hope we never have to take

If you’ve never before been forced to look for senior care, you probably know practically nothing about it. Families often have to learn the ropes while they navigate a crisis.

Families dealing with crises like these often call social workers or senior care counselors for help. Counselors ask questions to assess the needs of the senior and the family. The counselor will ask about clinical, mental and cognitive health, as well as care needs -- such as requirements around bathing, dressing, toileting, etc. Based on the senior’s condition and needs, the family is presented with care options that match their needs.  After determining the appropriate care type, the conversation moves to costs and financing. When the approximate price of care is explained, prospects and their loved ones Invariably they’d ask, “Will insurance pay for this?”

The $105,000 question: Will insurance help?

That’s the million dollar question that brings us back full circle to where we started. Or, more accurately, the $105,000 question, considering the average cost of assisted living is $3,750 per month, and the average assisted living stay is 28 months.

In the spirit of authenticity, the most accurate answer to their question about whether insurance covers assisted living is, “probably not.” Typically when families ask this question, they are referring to health insurance, either private insurance or Medicare, and those options just aren’t much help. Yet in some cases the insurance families are referring to is long-term care insurance, which actually can be a big help -- yet not always.

Sacrifice and compromise are painful but often necessary

Paying for senior care is no small feat, but families routinely make it work, even sometimes families that consider themselves poor or “lower middle class”. It’s not easy but things do have a way of working out. A broad network of relatives may have to chip in what they can. Veterans benefits may help. The church may help. Houses can be sold and reverse mortgages entered into. Life insurance policies may be cashed, and classic cars and vacation homes sold. Stock can liquidated and old jewelry a precious medals parted with.

What’s more, compromises around providers, apartment sizes, and amenities may need to be made, such as choosing a smaller room in a budget-friendly community instead of a spacious apartment in the luxury high-rise community. It’s hard to count on the generosity of others, and disappointing to settle for less than what we hoped for. Yet it’s worth noting most senior care experts would choose a low-frills community staffed with kind, centered, knowledgeable caretakers over a luxury community with cold, uncaring staff with mediocre skills.

We all want the best for our loved ones, and no family hopes to have to make hard choices like these. But money's just money and things are just things. Are closest family members sacrificed so much for us. In their autumn years, when their bodies, minds, or both, have passed their peak, it’s our time to repay that debt.

Insurance types and assisted living

As you know now, the only good answer when one asked if insurance covers assisted living is, “It depends.”

Assisted living is, by nature, non-medical, so most types of health insurance do not cover assisted living. But there can be rare exceptions when the insurer is Medicaid.

On the other hand, long-term care insurance can pay for assisted living; yet it doesn’t always.

Let’s look at the main types of insurance that consumers have in mind when they ask if insurance covers assisted living.

Medicare

Medicare is the health insurance all Americans are eligible for when they turn 65. Disabled Americans may qualify for Medicare at any age.

Medicare is strictly health insurance, and therefore it does not pay for assisted living, or any type of non-medical long-term care.

Medicaid

Medicaid is public health insurance available to Americans with very limited income and assets. It does cover long-term care when that care is medical, generally at a skilled nursing facility. Yet in some states, Medicaid may be used cover some expenses at an assisted living community.

Each U.S. state administers its own Medicaid program, with its own particular rules and regulations. In some states, it is easier for consumers to use Medicaid for assisted living than in others. Some states don’t enable consumers to use Medicaid to cover assisted living at all.

Even in states where Medicaid can be used to pay for assisted living, Medicaid may only cover the portion of expenses related to care, with residents responsible for the room and board.

What’s more, while some states may technically help to cover assisted living through their Medicaid programs, a limited number of assisted living communities may actually be able to accept Medicaid, and there are often waitlists for Medicaid space at assisted living communities that do.

Private health insurance

Unfortunately, private health insurance, such as through an employer or a retirement plan, almost never covers assisted living, or any other type of long-term care. Naturally, you should check with you insurer to make sure you fully understand your benefits, but don’t count on private health insurance to help.

Long-term care insurance

Long-term care insurance is quite different from health insurance, and can often pay for assisted living. But you must check the details of your policy. Every long-term care insurance policy is different. Some long-term care policies were written before assisted living became a normal care-type. It’s also not uncommon for long-term care policies to be written such in ways that that exclude assisted living. For instance, a provider may not be covered unless they have a nurse on staff a certain 24 hour per day -- and not all assisted living providers would meet this criteria.

On the other hand, some policies may unambiguously cover assisted living. It just depends on the fine print of the plan. You will need to closely explore your coverage, or check with your insurer, to to understand if your long-term care plan covers assisted living.

Real talk about assisted living expenses

We don’t mean to paint an unnecessarily dire or pessimistic picture of the finances of assisted living. It’s important for senior care consumers to have a realistic picture of what they are dealing with. For better or worse, health insurance rarely or never covers assisted living, with the exception of Medicaid, which only sometimes can be of help. Long-term care insurance can be a tremendous help, but it depends on the details of the policy.

The fact of the matter is that assisted living costs are paid privately in the vast majority of cases. But we hope you agree the best thing for consumers learning about assisted living costs is to have clear information that doesn’t gloss over the issue or its challenges.

 

Again, these are general rules regarding insurance coverage. To find out more specifics about financial assistance opportunities, contact a Milestone Retirement community near you.